Financial management of your business is not all about balancing books but it is all about using financial information to make better decisions and to drive your business. This is where outsourced accounting can be used. Outsourcing of accounting has become a trend and many companies no longer outsource accounting as a cost cutting measure. It is also about having access to top-notch financial insights, enhanced operation efficiency and minimized risk.
Now, why is outsourcing accounting going to help your bottom line? Let us count the ways.
Savings on Labor and Overhead Expenses
The costs of recruiting a full time, in house accountant or a team of them are quite expensive. They can cost you in terms of salaries, taxes, insurance, training and equipment, and they can easily consume your profits.
Most of these overheads are eradicated through outsourced accounting. You just pay on the services that you require and you do not have to concern yourself with payroll tax, employee benefits, time off, or software and office costs. The average salary of an in-house accountant in Minnesota is more than 68,000 dollars per year, without counting the benefits and infrastructure. With outsourcing, you are able to divert these savings into other income generating areas of your business.
Get Expertise of the Top Level
By contracting a reliable accounting firm, you are not only getting basic bookkeeping services, but also the services of a group of trained professionals. Most of these companies possess an industry-specific expertise and high level of analytics, forecasting, risk management, and compliance.
This high level of expertise would be particularly useful in a current tight job market where a lot of businesses are finding it hard to hire and retain quality accountants. Outsourcing closes that gap and will mean that your business gets the expertise without the recruitment and retention headache.
Make Better Financial Decisions with Real Time Insights
It is crucial to know the liquidity, profitability and efficiency measures such as gross margin, inventory turnover or debt-to-equity ratios to make good financial decisions.
Outsourced accounting firms also come with sophisticated analytical tools and financial reporting which allows you to go deeper into your figures. All these insights enable business owners to make wiser decisions, plan in advance, and determine new growth opportunities.
Manufacturers enjoy the advantage of inventory analysis.
The providers of services can monitor the revenue per employee to enhance productivity.
Retailers may base their metrics on sales per square foot or cost of acquiring a customer.
With the right metrics being tracked, your outsourced accountant will assist you in making day-to-day decisions in line with your long term financial objectives.
Minimize Risk and Fraud Prevention
Having only one or two internal employees to take care of the accounting aspects means that your business is at greater risk of fraud or error. Outsourcing adds more eyes over your financials, more internal controls and monitoring.
The outsourced accountants are also trained to identify inconsistencies, errors and to alert you of anything that is suspicious. This minimizes the possibility of fraud and ensures you that your books are being managed in a professional manner and in a transparent manner.
Remain Regulatory Compliant
Government regulations and compliance standards are changing all the time. Depending on the industry, there may be a wide range of tax filing requirements and other financial disclosures that need to be adhered to.
Outsourced accounting firms have it as their business to keep up to date with the current laws and this helps your business to be in compliance. This reduces the chances of fines, penalties, or even legal problems, and this ultimately safeguards your bottom line.
Make correct forecasts and budgets
Another advantage of outsourcing which is least discussed is the strategic planning. A good outsourced accountant does not only record past transactions, he/she helps you look to the future.
They can help you to come up with reliable budgets and forecasts by identifying and monitoring Key Performance Indicators (KPIs). This will enable your business to be financially nimble, and expect changes in the market and future investments.
Some of the useful KPIs are:
- Employee sales
- Hourly sales
- Square foot sales
- Trends in the cash flow
- Expenses and revenue
Powerful forecasting will help your leadership team make decisions that are informed and data-driven to stimulate stability and long-term growth.
Free Your Staff to Work on Expansion
Outsourcing accounting also gives your internal staff the ability to concentrate on what they are good at, serving customers, developing products and scaling the business.
By getting the burden of bookkeeping, payroll, tax filing, and reconciliations off the workload of your team, they will be able to focus more on strategic initiatives and innovation. The result of that sharper focus can be improved customer care, increased productivity and profits.
Digital Transformation
Outsourced accounting firms frequently introduce new accounting software and digital tools as part of the services. Such tools not only automate routine work, but also increase data accuracy, minimize manual errors and make reporting easier.
This digital revolution assists in revamping your business processes and makes the finance department a strategic contributor to growth. And, what is more, with cloud-based tools, you will have access to your financial data anywhere in real time.
Enjoy a Scalable Solution
As your company expands, your accounting requirements will change. You might require more detailed reporting, more detailed analysis or more advanced forecasting. Outsourced accounting services are adaptable and adjustable. You may begin with the basic bookkeeping and may expand to the following services:
- Monthly financial reporting
- Payroll processing
- Invoicing
- Budget planning
- CFO advisory
- Bank reconciliation
This implies that you do not pay more than you need and you can easily expand without any need of recruiting or restructuring your staff.
Use External Point of View as a Strategic Advantage
Very often, a company needs an outside view. By hiring an outsourced accounting team, you and your company get a new and objective perspective of your operations. They have a higher chance of identifying obsolete procedures, redundant expenditures, or other opportunities that may be lost to internal teams because of familiarity or prejudice.
This third party perspective can assist you in identifying the inefficiencies that are not visible and can be used to open up new strategies that can improve performance and profitability.
Power Your Business to the Future
Outsourcing your accounting needs to an outsourced accounting firm does not only provide your company with technical expertise, but it also provides your company with strategic direction. Financial statements that are deeper than surface level and metrics that can assist in the prediction of future performance can help your business navigate the uncertainty with less amount of fear and worry.
Rather than responding to financial matters when it is too late, your company is proactive. You develop early-warning systems with the help of the data trends, align financial objectives with operational results, and make more effective investment decisions.
Final Thoughts
Outsourcing of accounting is not only a cost-cutting measure, but also a means of creating a smarter, more efficient, and forward-looking business. Outsourced accounting can provide you with advanced financial insights and fraud prevention, better forecasting and scalability, and much more, all of which have a direct impact on your bottom line.
Outsourcing may be the right decision to relieve your business of the burden of accounting and to maximize your business potential. The Finance Focus is ready to talk with you, today, about how outsourced accounting services can help you achieve your financial goals with confidence.
